Many companies and organizations are continuing to look for ways to reduce their internal cost of operations and overhead. Implementing LEAN manufacturing principles has become a very important concept and one that may help improve overall efficiency of operations, directly impacting bottom line results. This blog is written for those organizations.

03/06/2015

Manufacturing Woes Rise; Experts Eye Higher Wages

The following article was first seen in the Pittsburgh Post-Gazette online version. The article was written by Len Boselovic. Mr. Boselovic and be reached at 412-263-1941.

An estimated 2 million U.S. manufacturing jobs will go unfilled over the next decade because workers lack the skills to fill those positions, according to a study released Wednesday by an industry research group and a major accounting firm.

But skeptics say that shortfall would be significantly lower if manufacturers raised their wages.

The estimate by the Manufacturing Institute and Deloitte is based on projections that 2.7 million baby boomers who currently work in manufacturing will retire over the next decade and that economic growth over that period will create another 700,000 manufacturing jobs. The 450 manufacturing executives surveyed by the two organizations said they are worried that about 60 percent of their current jobs are unfilled because applicants lack the required skills.

Applying that 60 percent rate to the 3.4 million projected openings results in an estimated 2 million jobs going unfilled between now and 2025.

The Manufacturing Institute is the research arm of the National Association of Manufacturers. Deloitte is a global accounting firm that also provides consulting and other services.

Their projection assumes workers will retire at age 64. About two-thirds of those surveyed last year by the Employee Benefit Research Institute, a Washington, D.C., research group, said they retired when they were 64 or younger.

Mr. Wheaton said the failure of applicants to pass drug screening tests could also explain why some jobs go unfilled.

Alan Tonelson — whose RealityChek blog covers economic, trade and related issues — said sluggish growth in manufacturing wages since the recession ended in mid-2009 may have something to do with the unfilled positions.

“You have to wonder if more generous wages and compensation numbers would go a long way” to alleviating the shortage, Mr. Tonelson said.

A spokesman for Oberg Industries said the study’s estimate of the skills shortage is believable even though it does not apply to the Buffalo Township manufacturer. David Getty said he ran the 60 percent figure by several colleagues and “they can’t seem to dispute those numbers even though they seem to be high.”

Oberg, which produces machined and stamped metal components, currently has 17 job openings and could have eight to 10 more by the end of the week, Mr. Getty said. That would represent about 5 percent of its current Pennsylvania workforce of more than 600, he said.

Mr. Getty said Oberg plans for baby boomer retirements by enrolling about 30 candidates annually in its apprenticeship program.

Some of the shortage of skilled workers also can be traced to unfavorable perceptions about manufacturing. Deloitte and the institute surveyed 1,000 households and found that only 37 percent of parents would encourage their children to pursue manufacturing careers. They were concerned that manufacturing jobs are the first to be shipped overseas and that such a career lacks stability.